Trader: Inflation has not derailed the September interest rate cut, and next week will be a very busy week

The Federal Reserve is still on track to cut rates at its September 16-17 meeting following the release of the PCE data. "The PCE reduces yet another risk that a September rate cut could be derailed," said Michael Lorizio, head of US rates trading at Manulife Investment Management. "The inflation component, at least from that perspective, won't do anything to reduce the chances of a September rate cut." Long-term bond yields moved higher on Friday as traders position squaring ahead of the long weekend and readjusted positions at the end of the month. Some interest rate hedging could also have an impact on the market, with the corporate bond market expected to pick up next week when many return from their summer break. "We're in for a very busy week," Lorizio said. The primary market and all markets for spreads will return across the board, especially the corporate bond market. "There will also be employment data for August next Friday, which could be the key to determining the Federal Reserve's near-term policy. (Jin Ten)